NEW YORK Ferrous scrap export prices off the East Coast dropped by about $6 per tonne Friday after exporters booked several bulk sales to Turkey in late-week trading.
Two exporters reportedly completed double bulk cargo sales to different Turkish mills on Thursday and Friday at lower prices than recent transactions.
Market sources in the United States and Turkey confirmed one 85,000-tonne sale to Turkey comprising an 80/20 mix of No. 1 and No. 2 heavy melt, shredded, and plate and structural scrap at $408, $413 and $418 per tonne c.f.r. Turkey, respectively.
A second U.S. exporter was said to have made another sale of two bulk cargoes to a different Turkish steel producer at the same price levels.
These prices are nearly $6 per ton lower than previous sales, which averaged about $414 per tonne for HMS 1&2 (80:20) delivered into Turkey. Exporters sold seven bulk cargoes the previous week at around the same price level (amm.com, Aug. 13) before allowing prices to cool slightly this past week.
Sources said the slightly weaker pricing was brought on by softer European sales into Turkey and relatively lower demand. On Friday, sources reported that a 40,000-tonne bulk cargo from the United Kingdom was sold at a composite price of $409 per tonne c.f.r. Turkey for HMS 1&2 (80:20) and plate and structural scrap.
A second 35,000-tonne cargo out of Europe was sold into Turkey at between $406 and $408 per tonne c.f.r. for 28,000 tonnes of A3 scrap and 7,000 tonnes of plate and structural, a number of sources said.
Following the double bulk cargo sales, U.S. sources said they expect the market to turn quiet over the next few days as Turkey enters a long holiday.
"There will be a dearth of activity in the marketplace with Turkish Ramadan bank holidays basically taking them out of serious play for at least a week. It will get quiet. On the plus side for exporters, freight is not something to lose sleep over at moment," said one source.
Meanwhile, West Coast market participants said the market was struggling to book bulk sales into South Korea and Thailand.
No bulk sales were reported after a lone bulk shipment to Vietnam was made earlier this past week.
Sources also confirmed previous reports that a large South Korean consumer had canceled a bulk order made two weeks ago with a U.S. exporter at $407 per tonne c.f.r. for No. 1 heavy melt, originally scheduled for October delivery.
AMM understands that the South Korean consumer expects prices to trek lower by October and was able to step out of the contract amicably as domestic prices in the United States strengthened, offering the exporter a chance to secure higher pricing for its scrap. Earlier rumors that there may have been an issue in raising a line of credit were deemed unfounded by the market.
South Korean demand for West Coast bulk is likely to remain weak over the next few weeks, one source said, as consumers have built strong scrap inventories and are able to shop from nearer shores.
One of the largest consumers in South Korea is estimated to be running an inventory of about 600,000 tonnes of ferrous scrap across three locations and is not likely to step into the U.S. market until September.
"There will be no offers until next week, and by the beginning or middle of September, (the consumer) will look to up new cargo from the U.S.," a second West Coast source said.
Speculation that a bulk sale had been completed to Thailand was also shot down by sources, including the exporter in question.
"I have not been able to do a deal. They need to buy but are waiting to see where the market goes," a source at the rumored exporter said.